Trinity Capital Inc. (TRIN) shares saw a 1.8% increase in after-hours trading after the company revealed a new share repurchase program on Thursday.
Details of the New Buyback Program
The board of directors of TRIN approved a $30 million share buyback plan, which will either conclude on November 7, 2025, or when the funding is fully utilized.
The company’s management stated they intend to “take advantage of situations” where repurchases could benefit both Trinity Capital and its shareholders.
Previously, in November 2022, Trinity Capital authorized a $25 million buyback that expired on November 11, 2023, during which 0.9 million shares were repurchased at an average price of $10.91.
Trinity Capital’s Consistent Dividend Practices
Besides its new buyback initiative, TRIN is known for paying regular dividends.
As a business development company, Trinity Capital must distribute 90-100% of its taxable income to maintain its regulated investment company status.
Currently, TRIN pays a quarterly dividend of 51 cents per share, marking a 2% increase announced in March 2024. Over the past five years, the quarterly dividend has been raised ten times, leading to an annualization growth rate of 18.69%.
Given the closing price of $13.63 on Thursday, TRIN’s dividend yield stands at 14.97%, which significantly exceeds the industry average of 10.12%. This yield is appealing for income-focused investors, offering a reliable income source.
Trinity Capital Inc. Dividend Yield (TTM)
Trinity Capital Inc. dividend-yield-ttm | Trinity Capital Inc. Quote
Analyzing Capital Distribution Sustainability
As of September 30, 2024, Trinity Capital reported $228.5 million in liquidity, which includes $8.5 million in unrestricted cash and cash equivalents.
For the nine months that ended on September 30, 2024, the company recorded total investment income of $166.9 million, reflecting a year-over-year increase of 24.5%. However, the net investment income per share declined by 7.2% to $1.54, affected by rising interest expenses and other financing costs.
Despite these challenges, with a strong liquidity position and solid earnings, Trinity Capital is expected to continue effective capital distribution strategies.
Currently, shares of this Zacks Rank #3 (Hold) firm have decreased by 5.5% over the past three months, against the industry’s growth of 4.2%.
Recent Trends Among Financial Firms
Comerica Incorporated’s (CMA) board has authorized an additional buyback of up to 10 million shares of its outstanding common stock, with no expiration date. This comes alongside 5 million shares still available under the previous repurchase program as of September 30, 2024.
CMA plans to repurchase about $100 million worth of shares in the fourth quarter of 2024.
SEI Investments Company (SEIC) raised its stock repurchase program by $400 million in October 2024, increasing the total authorization to approximately $429 million, which includes $29 million from an existing buyback program.
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Additional Resources
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Free Stock Analysis Report for Comerica Incorporated (CMA)
Free Stock Analysis Report for SEI Investments Company (SEIC)
Free Stock Analysis Report for Trinity Capital Inc. (TRIN)
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